ELECTION 2010: Government accuse Abbott of imposing new tax on business

The Government is also stepping up its attack on Opposition leader Tony Abbott’s parental leave plan, claiming the levy on large employers used to pay for the scheme will result in an increase in living costs.

Modelling released by Treasurer Wayne Swan this morning claiming consumers will pay an extra 50c on every $100 spent on groceries if Abbott’s plan came into force.

Abbott’s leave scheme would see a 1.7% levy placed on the profits of companies that earn more than $5 million in net annual income to fund up to six months of paid leave for parents.

But the Government claims the Opposition’s 1.7% levy and its promise to abandon the 1% cut in the company tax rate that has been promised under the mining tax would result in an effective 2% rise in the company tax rate.

The Government has released modelling by KMPG which shows that a 2% rise in company tax would lead to a 1% increase in consumer prices.

Swan, Prime Minister Julia Gillard and Small Business Minister Craig Emerson are now describing the leave plan as a “great big new tax” and claim it will force big employers such as Coles and Woolworths to raise their prices as the pass on new costs.

”Mr Abbott is proposing to increase company tax for most companies by 1.7%. The Gillard Labor government is proposing to cut company tax by 1%. So there is almost a 3% difference,” Swan said.

However, Abbott has attempted to counter Labor’s cost-of-living claims by announcing an extra $89 million to increase child care rebates paid to parents.

Gillard has spent the morning by continuing to focus on health and a family policy this morning, announcing $277 million for suicide prevention and the establishment of a 24-hour GP phone help line.

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